The global risk sentiment remains high with coronavirus infections crossing 2.1mio, the IMF predicting 3% drop in global growth and global virus-related unemployment at +22mio. Asian currencies are under pressure Investors after the IMF said that Asian growth would likely be nil, a zero-growth year would be Asia’s first in 60 years. Petro currencies weakened yesterday on falling oil prices, despite the OPEC output reduction agreement. US$ remains the global safe haven currency of choice, with the US$ index +1/2 today against a basket of major currencies. US Jobless claims alongside US Housing data will be the markets primary focus for direction today.
Oil prices stabilized overnight with Brent crude +3% at the start of the North American trading session. Macklem a BoC governor candidate commented that the slump in global oil prices will outlast the coronavirus outbreak and could hammer the Canadian economy for years to come. C$ weakened alongside oil prices but held below the 1.4150 resistance level vs US$. Canadian manufacturing sales and ADP employment change data will be released this morning. Intraday Canadian data and oil prices will provide price direction. A break of 1.4150 see’s 1.4300 as the next resistance point, with 1.3980 providing intraday support.
Euro weakened vs a strengthening US$ but is managing to hold around the 1.0880 support level. Weaker than expected Eur Industrial production data MoM for Feb and an increase in German & French virus cases is adding pressure on Euro. The European Commission has published guidelines on reopening economies, but at this stage EU countries appear to be adopting independent approaches. Intraday US data will be the primary driver for Euro. Next minor support 1.0750 with 1.1050 remaining the key resistance level.
GBP has remained relatively steady vs US$ and has firmed vs Euro in the overnight session. The UK government is expected to announce today that the lockdown will be extended until early May. GBP is holding around 1.2500 level vs US$, a break of 1.2440 could see further weakness towards 1.2165 with resistance at 1.2645. US data will dictate direction today.